Colleague Neil Chenoweth’s remarkable reporting of the undercover activities of a secretive “operational security” unit supervised from News Corp’s Office of the Chairman and charged with fighting pay TV piracy is a reminder of the stakes involved in what was, and is, a multimillion-dollar war conducted in cyberspace.

Clandestine activities, in which computers were hacked, encryption codes for set-top boxes pirated and distributed via paid hackers through UK piracy site the House of Ill Compute to damage rivals represented war by another means, ruthless in its intent and deadly in its execution.

News Corporation’s pay TV rivals may not have been felled by these undercover activities co-ordinated by shadowy News operatives, but they were weakened to the point where, as Chenoweth reports, they became fodder for predators.

Speaking of predators, the Australian Competition and Consumer Commission is close to ruling on Foxtel’s $1.9 billion takeover of regional pay TV operator Austar.

Indications are that provided conditions are met on content sharing with Foxtel’s internet protocol TV (IPTV) and other such rivals, the ACCC will wave through the creation of a pay TV monopoly.

Might we suggest the consumer regulator hasten slowly in light of these latest revelations? Other shoes may drop. News owns 25 per cent of Foxtel in partnership with Telstra’s 50 per cent and James Packer’s 25 per cent, but has management control.

In their deliberations, ACCC commissioners might reflect on the fate of OnDigital, a UK rival to News’s BSkyB that collapsed in 2002 with losses of more than £1 billion, and 1500 jobs.

News denies involvement in the proliferation of OnDigital’s encryption codes, but emails in the Financial Review’s possession cast doubt on such denials.

The pay TV business is not for the squeamish – or those with shallow pockets. Sky Television in the UK, which Rupert Murdoch launched in 1989 and merged the following year with its rival BSB to form BSkyB, made substantial losses initially.

Foxtel has been in the red for much of its existence and so, too, has Austar.

No one pretends this is anything but a capital-intensive cut-throat business in which companies owe it to their shareholders to do all in their power to protect their intellectual property and investment.

However, the question in all of this is whether News exceeded what might be regarded as ethical and legal boundaries in defending its commercial interests in a raw environment in which pay TV and encryption processes were in their infancy, and under assault by pirates and rivals.

This was the Wild West in cyberspace in the 1990s – as opposed to the “Wild East” now that China has achieved gold medal status in the hacking business – when Murdoch set about creating a global pay TV footprint on which the sun would not set and which would deliver content generated in his Fox Studios and from tying up sporting rights.

All of this was accomplished with extraordinary persistence, to the point where Murdoch was close to persuading a friendly UK government to allow him to take out the 61 per cent of BSkyB he did not already own.

Not only is that not going to happen, but Britain’s broadcasting regulator, the Office of Communications (Ofcom), has embarked on a review of whether News Corp and James Murdoch qualify as “fit and proper” to run a broadcaster in the UK in light of the hacking scandals that have engulfed the company.

Although Ofcom seems unlikely to rule against News and its officers under present circumstances, these latest revelations – in a BBC Panorama program and in the Financial Review’s voluminous reporting – could hardly have come at a worse time for the company

It is under pressure in the UK in a spreading stink over allegations that not only did it hack dozens of phone accounts, News’s reporters and their facilitators suborned the police with gratuities that verged on bribery.

Meanwhile, in America, the authorities are looking into whether News Corp has contravened the Foreign Corrupt Practices Act, which is intended to curb payment of bribes by US companies to foreign officials. Payments to police might fall foul of the FCPA.

In light of these threats to reputation that are barely contained, it’s not surprising that News has begun to hit back. Murdoch himself took to Twitter to warn he would respond.

“So bad, easy to hit back hard, which preparing,’’ he tweeted.

But Murdoch and his lieutenants will have their work cut out for them.

The 14,400 emails the Financial Review has relating to the activities of News operatives involved in fighting – and promoting – cyber piracy represent a mother lode of evidence that is proving difficult to contradict.

News’s denials of wrongdoing are not convincing.

Tony Walker is the Financial Review’s international editor.

The Australian Financial Review

BY Tony Walker

Tony Walker is The Australian Financial Review's dual Walkley Award-winning international editor. He is the AFR's former political editor. His foreign postings have included Washington for the AFR, and Beijing and Cairo for the Financial Times of London. He received a Centenary of Federation Award for contributions to Journalism in 2001 and is a recipient of the Paul Lyneham Award for Excellence in press gallery journalism in 2003.

BY Tony Walker

Tony Walker is The Australian Financial Review's dual Walkley Award-winning international editor. He is the AFR's former political editor. His foreign postings have included Washington for the AFR, and Beijing and Cairo for the Financial Times of London. He received a Centenary of Federation Award for contributions to Journalism in 2001 and is a recipient of the Paul Lyneham Award for Excellence in press gallery journalism in 2003.